Sanchez v. Puerto Rico Marine Management, Inc.

• Decision Date: 22 August 1984
• Docket Number: Civ. No. 82-2419 GG.
• Parties: Roberto Serrano SANCHEZ, et al, Plaintiffs, v. PUERTO RICO MARINE MANAGEMENT, INC. and Union De Trabajadores De Muelles Y Ramas Anexas De San Juan, Puerto Rico, Local 1740 UTM-ILA, Defendants,
• Court: U.S. District Court — District of Puerto Rico

593 F. Supp. 787

Roberto Serrano SANCHEZ, et al, Plaintiffs, v. PUERTO RICO MARINE MANAGEMENT, INC. and Union De Trabajadores De Muelles Y Ramas Anexas De San Juan, Puerto Rico, Local 1740 UTM-ILA, Defendants,

Civ. No. 82-2419 GG.

United States District Court, D. Puerto Rico.

August 22, 1984.

COPYRIGHT MATERIAL OMITTED

Vincent M. Rotolo, Victor Sotomayor Clavell, Santurce, P.R., for plaintiffs.

Rafael Cuevas Kuinlam and Rafael Medina Zerpa, Hato Rey, P.R., for P.R. Marine Mgt. Inc.

Ada Pérez Alfonso, San Juan, P.R., for Local 1740, UTM-ILA.

OPINION AND ORDER

GIERBOLINI, District Judge.

This is an action brought under Section 9(a) of the National Labor Relations Act, 29 U.S.C. § 159(a),¹ and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, requesting monies owed to them and damages against defendants for alleged violations of collective bargaining agreements and breach of statutory duty of fair union representation.

Plaintiffs are all former employees of defendant Puerto Rico Marine Management, Inc.'s (P.R.M.M.I.) dock and terminal located in Isla Grande and members of defendant Unión de Trabajadores de Muelles y Ramas Anexas de San Juan, Puerto Rico, Local 1740 UTM-ILA (Local 1740). P.R.M.M.I. is a shipping agent engaged in interstate commerce; Local 1740 is a labor organization also engaged in interstate commerce. Jurisdiction is based under 28 U.S.C. §§ 1331 and 1337.²

Both defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. In the alternative, they move for summary judgment in their favor. Plaintiffs have opposed said motions.

I

A. Claims against co-defendant Local 1740.

According to the complaint, on November 1, 1981 plaintiffs complained to Local 1740 that P.R.M.M.I. and the Administrator of the UTM-PRSSA Welfare Plan owed them certain employee benefits under the collective bargaining contracts. Thereafter, on February 1982, plaintiffs submitted documentary proof to support their allegations. Nonetheless, on May 26, 1982 Local 1740 notified plaintiffs that it refused to process plaintiffs' claims. The Union allegedly began a campaign to force plaintiffs and other employees to withdraw their claims. Furthermore, during the month of June 1982, P.R.M.M.I. announced the closing of its dock and terminal in Isla Grande. Negotiations were then commenced between defendants to settle the terms of the termination of operations. As a result of such negotiations, P.R.M.M.I. paid all employees a lump sum final payment covering separation pay and other monies owed to the employees. Defendants allegedly forced the employees to sign a document stating that the payment was a final compensation for all monies owed to them. Those who refused to sign would not receive their checks. Consequently, all employees, plaintiffs included, signed the document. Additionally, on July 29, and on August 5, 1982, Local 1740 purportedly "required and caused defendant P.R.M.M.I. to deny employment" to seventeen Isla Grande employees who refused to withdraw their claims against their employer. The discharged employees were given a final payment of all monies owed to them on August 17, 1982. A deduction from the final payment was made for the benefit of Local 1740. Consequently, plaintiffs received less compensation than that to which they were originally entitled. Plaintiffs thus charge that Local 1740 violated its "duty to fairly and honestly handle and process their claims and grievances against P.R.M.M.I."

Plaintiffs further bring a pendent state law claim that Local 1740 conspired with P.R.M.M.I. to unlawfully deprive plaintiffs of their right to receive the "correct amount of salaries, benefits, other fees, and payments they were entitled to receive under the collective bargaining contracts" negotiated for the period between October 11, 1974 and August 18, 1982.

B. Claims against P.R.M.M.I.

In addition to the aforementioned charge of civil conspiracy which also includes P.R. M.M.I., plaintiffs claim that co-defendant P.R.M.M.I. violated their contractual rights under Articles XII and XIII of the collective bargaining contracts during 1974 through 1982. It is alleged that by the terms of Articles XII and XIII P.R.M.M.I. obligated itself to pay plaintiffs a Christmas bonus and a royalty fee in December of each year computed on the basis of the number of hours worked by each employee during the year. Co-defendant Local 1740 was to open a special bank account to effectuate the payments. Nonetheless, P.R. M.M.I. allegedly deposited the monies earned by plaintiffs and other Isla Grande employees in a trust fund administered by the trustees of an employee welfare plan known as the UTM-PRSSA Welfare Plan. As a result of said arrangement, plaintiff received less Christmas bonus and royalty fee payments than those to which they were entitled, and thus they now seek to recover the difference.

Plaintiffs further claim that P.R.M.M.I. violated Article IV of the collective bargaining agreements by making deductions from plaintiffs' salaries for their unpaid union dues. Under the terms of Article IV P.R.M.M.I. agreed not to deduct any amount from plaintiffs' salaries for union dues unless authorized by plaintiffs. They aver that they never gave said authorization, and that they repeatedly objected to said deductions.³ P.R.M.M.I. rejected all of plaintiffs' claims on July 28, 1982.

Finally, plaintiffs bring a state law claim stemming from the same aforementioned allegations requesting that all monies owed to them be returned as well as the penalty provided by Law 114 of 1979.

II

A. Defendants' claims.

Co-defendant P.R.M.M.I. alleges first that plaintiffs have failed to exhaust their contractual remedies as provided in the collective bargaining agreements. Secondly, both defendants claim that the recent decision of the United States Supreme Court in Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983) bars all of plaintiffs' claims which antedate six months of its filing on October 6, 1982. Finally, they aver that any surviving claim is barred by the doctrine of res judicata. Because the statute of limitations issue is dispositive of most of plaintiffs' claims, we shall address it first.

1. Statute of Limitations — Retroactive Application of Del Costello.

In Del Costello, the Supreme Court decided that a six-month statute of limitations applied to suits brought by an employee against his employer for breach of a collective bargaining agreement and against his union for breach of its duty of fair representation. Previously, the Court in United Parcel Services, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981) had decided that suits by an employee against his employer were governed by a state's statute of limitations for vacation of an arbitration award or by an analogous state statute. However, Mitchell left open the question of which statute would cover employee suits against a union. Noting the importance of having a uniform statute of limitations, the Court in Del Costello found that the six-month period of Section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), should govern claims by an employee against either the employer or the union.

The Court reasoned that the short state limitations periods for vacating arbitration awards failed to provide the aggrieved employee with a satisfactory opportunity to vindicate his rights under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 and the fair representation doctrine. In contrast, Section 10(b)'s six-month period for filing unfair labor practice charges reflected a proper balance between the competing interests of according prompt resolution to labor disputes and of providing an employee with a reasonable period of time to file suit. See Derwin v. General Dynamics Corporation, 719 F.2d 484 (1st Cir.1983).

Thus, it is clear that for actions which accrued after Del Costello the appropriate limitations period is six months. However, whether Del Costello applies retroactively to this case is the issue now at hand.

We begin our analysis by noting that our task has been recently simplified by the United States Court of Appeals for the First Circuit's holding in Graves v. Smith's Transfer Corporation et al, 736 F.2d 819 (1st Cir.1984) that Del Costello applied retroactively. In concluding that retroactivity was warranted the court applied the three-factor litmus test enunciated in Chevron Oil Company v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). In addition, it imparted particular weight to the precedent set by the Second, Third, Fourth, Fifth, Seventh, Eighth, and Eleventh Circuits which had already decided that Del Costello should be applied retroactively.

Similarly, we will also briefly undertake the Chevron analysis. The first factor that must be determined is whether the decision establishes a "new principle of law, either by overruling clear past precedent, or by deciding an issue of first impression whose resolution was not clearly foreshadowed." Chevron, 404 U.S. at 106, 92 S.Ct. at 355. As was the case in Graves, plaintiff here argues that Del Costello abruptly overruled reliable precedent of a one year statute of limitations for actions against the union and a fifteen-year period for suits against the employer established by De Arroyo v. Sindicato de Trabajadores Packing, AFL-CIO, 425 F.2d 281 (1st Cir.1970).⁴ However, "Del Costello was not a clear break from prior law and notice of a shorter period being applicable was given in Mitchell." Graves, at 821, quoting from Lincoln v. District 9 of International Association of Machinists and Aerospace Workers, 723 F.2d 627, 630 (8th Cir.1983).

The second factor to be weighed is whether retroactive application "will further or retard" the operation of the rule in...